Identity theft and fraud is a very real threat to consumers with open credit accounts. Thanks to a few opportunistic thieves, good credit can quickly become bad credit after just a few shopping trips.
Sophisticated scammers have even been known to open faulty credit accounts in other people’s names, once they’ve stolen their information. This could mean taking out a car loan, credit card, or even a mortgage. This is where the credit freeze comes in – a consumer tool designed to prevent fraudsters from using another person’s credit.
If a consumer fears becoming a victim, they can “freeze” their credit report, meaning no lender will be able to obtain it – an effective blockade to any scammers. Fees vary by state, but consumers can place a freeze on their account at all three credit bureaus for under $60 total, and the fee is waived if the person proves he or she has already has already been victim of a fraud.
Consumers should know that freezes won’t stop a thief who has stolen a credit card from using it. But it will prevent them from turning that information against the owner. It also takes a long time to “thaw” the credit, meaning that consumers should secure any car loans or other financial obligations that they will need credit for before putting the freeze